Penney Hires Its Own Martha

By Brook S. Mason
from the New York Times — August 3rd, 2003

THE J. C. Penney Company is trying to create the new Martha.

Ever since Martha Stewart’s indictment for obstruction of justice in the ImClone Systems securities fraud scandal, mass-market retailers have seen the moment as an opportunity to usurp her role as the goddess of goods. Ms. Stewart’s towels, sheets and housewares have given the Kmart Corporation a profitable, signature style.

This week, Penney recruited designer Chris Madden, the author of 15 books as well as a column syndicated to 400 newspapers, to be the company’s Home Collection spokeswoman and design expert. Mrs. Madden will develop products that will be rolled out next year.
Penney, with some 1,000 stores and $1.4 billion in sales a year, is hoping to reach at least $2 billion in sales with the help of Mrs. Madden, according to Charles Chinni, executive vice president for Penney’s home, fine jewelry and family footwear divisions. She will create a new brand for the store called Celebrating Life/Creating Style.
"She represents everything we believe in: trust and value," said Mr. Chinni. "Bringing her on will enhance our already more than century old brand." He cites her creative direction and soothing inspirational message as significant strengths.
"Now, I’m their $500 million baby," said Mrs. Madden, whose office is just steps away from the train station in Rye, N.Y., a Manhattan suburb.

Selecting Mrs. Madden was no simple task. Penney looked at some 20 candidates. The negotiations included five trips by Mrs. Madden to the company’s Plano, Tex., headquarters, more than a dozen face-to-face meetings and more than 200 telephone calls. Mr. Chinni even met her two college-age sons. Her husband, Kevin Madden, a former Conde Nast publisher, serves as president of Madden Inc.
Mrs. Madden already boasts some retail success. She has branded some 200 products with various companies, ranging from a $2,500 hand-painted bookcase for Bassett Furniture to a $29.95 chenille throw for Mohawk.

Even so, she differs markedly from Ms. Stewart. She touts a decorating theme based on the spiritual strengths of renewal and celebration, as well as simplicity.

Her philosophy apparently resonates with some consumers. It has propelled her book, "A Room of Her Own: Women’s Personal Spaces," into its 11th printing. Sales of her home furnishings line for Bassett, the company has said, have reached $100 million in less than two years. Her line of rugs, throws and pillows for Mohawk has sold about $10 million, according to Mrs. Madden.
Penney offers furniture, but it only has a small fraction of the total furniture market in the United States. It is much stronger in sales of curtains, bedding and towels.

While Penney has high hopes for its new face, and while the one-person, one-brand formula personified by Ms. Stewart has frequently been cited in Harvard Business School case studies, its usefulness is now being questioned. "Investors today see having one human being represent one entire brand as a pronounced liability," said Laura Richardson, a retail analyst with Adams, Harkness & Hill in Boston.

Mr. Chinni believes there is no big risk for Penney in signing with Mrs. Madden. But banking on her helping the company race ahead of Kmart may be overly optimistic with the sputtering economy and high unemployment. For one thing, the price points of the two retail companies are far apart. A comforter at Penney’s retails for up to $299 in contrast to $99 at Kmart.
Products aside, branding experts say a major portion of the success of Martha Stewart was due to her initial roll out of extensive editorial promotions in her magazine, Martha Stewart Living, long before the introduction of her home furnishings.

While Mr. Chinni said he has no plans for a magazine in collaboration with Mrs. Madden, she has had a magazine in the works for close to two years. Both the American Express Company and the Hearst Corporation have studied the mock-up of what she would like to be a bimonthly, Haven. Now, a group of private investors is looking at her magazine dummy, she said.